Wall Street has a short memory and an even shorter fuse.
When a stock cracks, conviction tends to follow price, not the other way around. Investors who loved a company at $300 will quietly hate it at $145, even when the underlying business has barely budged.
That pattern has been playing out in real time inside one of the most-watched names of the artificial intelligence (AI) trade. Six months ago, this software giant was being called the “fourth hyperscaler,” a legacy company that finally woke up and grabbed a seat next to Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOGL).
Then the bond market got nervous. A class-action suit landed. Capital expenditure guidance ballooned to $50 billion. The stock cratered.
Now one of the loudest tech bulls on Wall Street is telling clients the selling has gone too far on Oracle (ORCL), and putting a real number on the line to back it up.
That bull is Wedbush Securities’ Dan Ives, and the message is unusually direct.
What Ives just told Oracle investors
In a note initiating coverage on April 24, Ives slapped an Outperform rating and a $225 price target on Oracle, implying “27.6% upside from its April 23 close,” according to CNBC.
His core argument is that the market has the story backwards.
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Oracle is “on a path to become a foundational infrastructure provider for the AI Revolution, and the market is fundamentally misinterpreting the company’s aggressive, contract-backed investment cycle as speculative risk,” Ives wrote in the note, CNBC highlighted.
The pushback is aimed squarely at the bears who have driven Oracle down nearly 25% this year. Skeptics see negative free cash flow, soaring debt, and a single-customer dependency on OpenAI. Ives sees a contracted backlog the size of small countries.
“We argue this view is backward-looking and fails to appreciate the scale of contracted demand underpinning the investment,” he added, according to Sherwood News.
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I ran the numbers myself, and the gap between bull and bear here is unusually wide for a stock this big.
How Oracle’s $553 billion backlog became a problem
Oracle’s bull case starts with one number, and it is a number most software companies will never touch.
That number is $553 billion. Oracle’s remaining performance obligations, the dollar value of contracts signed but not yet delivered, hit that mark at the end of fiscal Q3 2026, “up 325% year over year,” according to The Motley Fool.
For context, that backlog is bigger than the entire annual revenue of Walmart (WMT).
The catch is timing. Most of that money does not start landing on the income statement until 2027 or later, while the cost of building the data centers to deliver it is hitting Oracle’s books right now.
Capital expenditures for fiscal 2026 climbed to roughly $50 billion, “43% more than what was projected just three months earlier,” reported CNBC.
Free cash flow has turned brutally negative. The quarterly print swung to “roughly negative $13.2 billion” in fiscal Q3, according to Yahoo Finance.
That mismatch is what spooked investors. Spending now, revenue later, and a balance sheet getting heavier by the quarter.
Here is the math on Oracle’s 2026 selloff in five numbers:
- Stock down roughly 24% year-to-date in 2026.
- Remaining performance obligations of $553 billion, up 325% year over year.
- Fiscal 2026 capital expenditures of roughly $50 billion, double last year’s spend.
- $30 billion raised through investment-grade bonds and convertible preferred stock.
- A reported $300 billion contract with OpenAI scheduled to start in 2027.
What Larry Ellison and Wall Street are betting on
Ives is not alone. Of the 46 analysts covering Oracle, “35 have a buy or strong buy on the stock,” according to CNBC, citing data from LSEG.
That kind of consensus on a stock down nearly a quarter in four months is unusual.
Oracle co-founder Larry Ellison has spent the past year repositioning the company from a database firm into something closer to an AI utility, building gigawatt-scale data centers and signing whale-sized cloud contracts.
“The capability we have is to build these huge AI clusters with technology that actually runs faster and more economically than our competitors,” Ellison said on a recent Oracle earnings call, according to Quartz.
What struck me when I worked through the broader analyst commentary is how openly the bulls are framing this as a balance-sheet question more than a tech question. Ives flagged that Oracle has already raised $30 billion through investment-grade bonds and mandatory convertible preferred stock, “a strategic move to fortify its balance sheet and secure the resources needed to meet its contractual obligations,” according to CNBC.
CEO Clay Magouyrk made a similar point on the company’s last earnings call. Oracle will “need less, if not substantially less money raised” than the high end of its $50 billion capital raise, Magouyrk said, according to TIKR.
Bears remain unconvinced. “Considering Oracle is already barely hanging on to an investment grade rating, we would be concerned about Oracle’s ability to live up to these obligations without restructuring its OpenAI contract,” analysts at D.A. Davidson wrote in a December note, according to CNBC.
Execution risk on one side, contracted demand on the other. That is the story.
What to watch from here on Oracle
For the average reader holding Oracle inside an S&P 500 index fund, a 401(k), or a target-date retirement account, the question is simple. Does the AI infrastructure story end with Oracle getting paid, or with Oracle drowning in debt?
Ives and the consensus bulls say the answer arrives the moment those contracted gigawatts start metering revenue in 2027.
Until then, expect the stock to trade on every capex update, every bond auction, and every line in OpenAI’s results.
The Wedbush thesis comes down to one observation. Investors are pricing the danger twice and giving zero credit to the contracts already signed.
If the build comes in on time and on budget, today’s $145 share price will look like the bargain of the AI cycle. If it does not, the bears will get a victory lap.
Wedbush just put $225 on the line. The next year of Oracle’s stock will tell us who was right.
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